In President Donald Trump's trade war, the states he won during the election are the most defenseless.
That's according to economists at Citi, who last week published a research note on which US states are most exposed to a trade war and what this means for the midterm elections.
"With several economies now imposing retaliatory trade actions in the wake of the Trump administration’s trade tariffs, the stakes have risen for, and the evidence more compelling against, 'red' states by several measures," Citi's Dana Peterson said in the note. Trade wars may reverse the "hiring bonanza," she added.
The tariffs — taxes on imports to the US — were sold as a way to level the playing field between US producers and their foreign competition, and grow industry even more. But China, the European Union, Canada, India, and Mexico are set to retaliate.
On Friday, the US and China imposed tariffs on $34 billion worth of each other's goods, with China's Ministry of Commerce saying in a statement that Trump launched "the largest trade war in economic history."
Red states, so-called because they're historically Republican or voted for Trump in 2016, stand to lose more because they benefit the most from trade with other countries, Citi's Peterson said. Imports and exports to red states totaled $2.1 trillion last year, compared to $1.7 trillion for Democratic blue states. Texas, Michigan, and Illinois were among the largest contributors to trade nationwide, since they have some of the largest ports.
After examining the kinds of goods that could be taxed, Citi found that red states ship more to countries that could retaliate US tariffs. These exports include various kinds of food, beverages, luxury goods and medical appliances — all of which are under the purview of tariffs.